DCCI wants budgetary steps to fix power, energy crises
Sunday, 9 May 2010
FE Report
The government must roll out a master plan for fixing the country's nagging energy crisis in the upcoming budget if it wants to win local and foreign investors' confidence in the economy, an influential chamber leader said Saturday.
Dhaka Chamber of Commerce and Industry (DCCI) president Abul Kasem Khan said Bangladesh has earned "stable" credit rating from the Moody's and the Standard and Poor's while top global investment bank Goldman Sachs has included it in a list of 11 emerging economies.
But these plaudits won't pay any dividend if the government fails to address the country's acute power and gas crisis that has worsened amid a skyrocketing gap in demand and supply.
"Undoubtedly, the international credit ratings will help Bangladesh woo foreign investors. But they will move out to countries like Vietnam if we cannot fix the power and energy crisis," said Mr Khan.
"Good governance and law and order situation are two other most important issues for creating congenial climate for investment," he said.
Mr. Khan was speaking at a press meet - which particularly focused on the upcoming budget to be unveiled on June 10 this year - at his office in the city.
He said the upcoming budget for the fiscal year of 2010-2011 is very important for the country as well as the business community as it should lay the foundation for scaling up industrial production to GDP's 40 per cent from the current 28 per cent.
"The biggest challenge for the upcoming budget will be to address the nagging power and gas crisis. Besides, no business will be interested to invest here, if there is no good governance and stable law and order situation."
Mr Khan said the government has to treble its budgetary allocation for energy and power sector to Tk 100 billion, with approval for open-cast coal mining for reaping maximum benefit of the country's abundant reserve of fossil fuel.
"Gas should be limited for industrial uses, whereas coal should be used to generate electricity," the DCCI chief said adding that a master plan on the issue needs to be formulated.
He said the tax-base has to be broadened to five million by 2015 to boost the tax-GDP ratio to at least double digit, up from the present 8.5 per cent.
"Our tax-GDP ratio is one of the lowest in the world. Even India - at 17.7 per cent - are ahead of us," he said.
"There is no need for the government to pressurise people - who are already under the tax-net - for more taxes."
Mr. Khan said the revenue generation from across the country has to be increased as Dhaka zone alone accounts for 42 per cent of total tax collection.
Barisal, Rangpur, Sylhet, Rajshahi and Khulna divisions contribute just one per cent each to national tax revenue, whereas 18 per cent comes from Chittagong zone, he said.
He urged the government to introduce tax-card - a brainchild of DCCI - that can help increase revenue collection through compliance and offering some social privileges to the taxpayers.
Mr. Khan said the government has to expand tax-net to non-business sectors and include professional groups such as doctors, lawyers and teachers.
Currently, around 0.7 million people pay income tax in a country where 55 million people have mobile phone and more than two million people have investment in the share market.
The DCCI president said budget allocation for public private partnership (PPP) should be doubled to Tk 50 billion in the next budget, although not a single taka allocated in the current budget could be spent.
"The money to the amount of Tk 25 billion could not be spent due to lack of policy framework," he said.
Mr. Khan also suggested the government keep provision for whitening of undeclared earning in the next budget, provided the beneficiaries pay at least 50 per cent tax.
He said Better Business Forum could be reactivated to directly share and consult many issues.
DCCI senior vice president M Shahjahan Khan, its vice president Sirajuddin Malik and directors were present on the occasion.
The government must roll out a master plan for fixing the country's nagging energy crisis in the upcoming budget if it wants to win local and foreign investors' confidence in the economy, an influential chamber leader said Saturday.
Dhaka Chamber of Commerce and Industry (DCCI) president Abul Kasem Khan said Bangladesh has earned "stable" credit rating from the Moody's and the Standard and Poor's while top global investment bank Goldman Sachs has included it in a list of 11 emerging economies.
But these plaudits won't pay any dividend if the government fails to address the country's acute power and gas crisis that has worsened amid a skyrocketing gap in demand and supply.
"Undoubtedly, the international credit ratings will help Bangladesh woo foreign investors. But they will move out to countries like Vietnam if we cannot fix the power and energy crisis," said Mr Khan.
"Good governance and law and order situation are two other most important issues for creating congenial climate for investment," he said.
Mr. Khan was speaking at a press meet - which particularly focused on the upcoming budget to be unveiled on June 10 this year - at his office in the city.
He said the upcoming budget for the fiscal year of 2010-2011 is very important for the country as well as the business community as it should lay the foundation for scaling up industrial production to GDP's 40 per cent from the current 28 per cent.
"The biggest challenge for the upcoming budget will be to address the nagging power and gas crisis. Besides, no business will be interested to invest here, if there is no good governance and stable law and order situation."
Mr Khan said the government has to treble its budgetary allocation for energy and power sector to Tk 100 billion, with approval for open-cast coal mining for reaping maximum benefit of the country's abundant reserve of fossil fuel.
"Gas should be limited for industrial uses, whereas coal should be used to generate electricity," the DCCI chief said adding that a master plan on the issue needs to be formulated.
He said the tax-base has to be broadened to five million by 2015 to boost the tax-GDP ratio to at least double digit, up from the present 8.5 per cent.
"Our tax-GDP ratio is one of the lowest in the world. Even India - at 17.7 per cent - are ahead of us," he said.
"There is no need for the government to pressurise people - who are already under the tax-net - for more taxes."
Mr. Khan said the revenue generation from across the country has to be increased as Dhaka zone alone accounts for 42 per cent of total tax collection.
Barisal, Rangpur, Sylhet, Rajshahi and Khulna divisions contribute just one per cent each to national tax revenue, whereas 18 per cent comes from Chittagong zone, he said.
He urged the government to introduce tax-card - a brainchild of DCCI - that can help increase revenue collection through compliance and offering some social privileges to the taxpayers.
Mr. Khan said the government has to expand tax-net to non-business sectors and include professional groups such as doctors, lawyers and teachers.
Currently, around 0.7 million people pay income tax in a country where 55 million people have mobile phone and more than two million people have investment in the share market.
The DCCI president said budget allocation for public private partnership (PPP) should be doubled to Tk 50 billion in the next budget, although not a single taka allocated in the current budget could be spent.
"The money to the amount of Tk 25 billion could not be spent due to lack of policy framework," he said.
Mr. Khan also suggested the government keep provision for whitening of undeclared earning in the next budget, provided the beneficiaries pay at least 50 per cent tax.
He said Better Business Forum could be reactivated to directly share and consult many issues.
DCCI senior vice president M Shahjahan Khan, its vice president Sirajuddin Malik and directors were present on the occasion.